Sony to exit PC market as it sheds 5 000 jobs

By Edd Gent

Published Thursday, February 6, 2014

Sony has axed its loss-making PC business to shift focus to tablets and smartphones after more than 30 years.

The Japanese electronics giant is disposing of its loss-making PC business, which trades under the Vaio brand, as part of a shake-up which will also see it shed 5,000 jobs amid what it described as "drastic" changes in the industry.

The firm launched its first 8-bit personal computer, the SMC-70, featuring BASIC computer language and 3.5-inch floppy drive, in 1982, but it now aims to conclude an agreement to sell Vaio to Japan Industrial Partners (JIP) by the end of next month.

Sony has been challenged by stiff competition from Samsung and Apple, and has instead identified its divisions making cameras, Playstations and Xperia smartphones as three core businesses to drive its growth in electronics.

The company said: "Following a comprehensive analysis of factors, including the drastic changes in the global PC industry ... the company has determined that concentrating its mobile product line-up on smartphones and tablets and transferring its PC business to a new company established by JIP is the optimal solution.

"As part of the business transfer to JIP, Sony will cease planning, design and development of PC products. Manufacturing and sales will also be discontinued after the spring 2014 line-up to be launched globally.

The company is also seeking to return its TV arm to profit by concentrating on sales of high-end models, though it said neither its TV nor PC businesses will be ready to return to profitability in the current financial year to the end of March.

The announcement came as the company predicted it would swing to a 110bn yen (£665m) loss for the current financial year, after a 43bn yen (£260m) profit in the year ending March 2013.

However there was a 27bn yen (£163m) profit for the third quarter, helped by improved sales of its smartphones and the launch of the Playstation 4.

Sony said it would cut its global workforce by about 3 per cent by the end of March next year, with 1,500 job losses in Japan and 3,500 overseas.